Li Ka-shing's appetite for acquisition appears insatiable. Having already gorged on telecom takeovers in Austria and Ireland, and hoping to consume the UK's O2, the billionaire chairman of Hong Kong's Hutchison Whampoa is now thought to have a greedy eye on Italy's Wind.

As in the UK, merging the target with his own small local unit would create the biggest mobile operator in the market by customer numbers, edging 3 Italia just ahead of incumbent operator Telecom Italia (TIM) . (See Hutchison Offers $13.9B for UK's O2, Hutchison in Talks to Buy UK's O2 – Report, Could Li Ka-Shing Crash BT's M&A Party? and Li Ka-shing in the Hunt for EU Telcos.)

The latest rumors originated with Bloomberg, which cited two people familiar with the matter as its source, but this is not the first time Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY) has been the focal point of mooted Italian consolidation.

In 2013, 3 Italia walked away from talks with Telecom Italia SpA about a mobile merger after the two operators reportedly failed to reach an agreement on valuation. It was a similar story last year, when 3 and Wind Telecomunicazioni SpA called off discussions over a deal: 3 wanted a controlling stake in a combined entity, it seemed, while Wind owner VimpelCom Ltd. (NYSE: VIP) preferred a joint venture.

What's changed since then? For one thing, Hutchison's desire to be a leading actor in the drama of consolidation is evidently stronger than ever. Realizing its chances of surviving as the disruptive challenger in each market are diminishing, the company is hungry for businesses that are typically much bigger than its own local units, allowing it to bulk up quickly. Telefónica UK Ltd. (trading as O2) had nearly 24 million mobile customers in the UK in June last year, at which time Three UK served fewer than 10 million. By the same measure, Wind is also more than twice as big as 3 Italia, with 21.8 million customers in June compared with 3's 9.8 million.

VimpelCom might also feel more inclined to sell a majority stake in Wind than it did last year. Describing the Italian market as "weak" in its latest earnings report (for the July-to-September quarter), it bemoaned recent pricing pressure and the entry of MVNOs into the market. Although conditions were a little better than in preceding quarters, mobile service revenues fell 9%, compared with the same part of 2013. Around 600,000 customers quit Wind's service over the same period.

The Italian subsidiary also remains saddled with about €9.9 billion ($11.3 billion) in net debt, more than five times what it made in EBITDA in 2013 and an increase of €769 million ($875 million) on the figure at the end of that year. Although these debts are "ringfenced" from VimpelCom's balance sheet, they obviously remain a concern. Earlier this month, Wind was reported to be negotiating an €800 million ($910 million) sale of its towers to Spain's Abertis to pay off loans. (See Eurobites: Operation 'Woo China' Kicks In.)

While VimpelCom's separate debt profile looks comparatively healthy, conditions in Russia, which accounts for nearly 40% of its revenues, are deteriorating fast. Because it reports in US dollars, VimpelCom has been hit badly by the depreciation of the Russian ruble, and it will struggle to sell smartphones and data plans to Russian customers this year as macroeconomic pain bites. Cut spending on the rollout of higher-speed networks and it risks falling behind big rivals Mobile TeleSystems OJSC (MTS) (NYSE: MBT) and MegaFon , and yet "demand-driven network investments" were blamed partly for a 7% year-on-year fall in Russian EBITDA in the October-to-December quarter. (See MTS Braced for Ruble Trouble and MTS's Russian Resolution.)

For all the latest news from the wireless networking and services sector, check out our dedicated mobile content channel here on Light Reading.

Clearly, takeovers of Wind and the UK's O2 would be much bigger deals for Hutchison than its European maneuvers so far. Its acquisition of Orange Austria Telecommunication GmbH. in early 2013 still left 3 Austria as the smallest network operator in a small three-player market. 3 also trails Vodafone in similarly lilliputian Ireland following its purchase of O2 Ireland last year. The UK and Italy, by contrast, are two of Europe's most populous countries and home to some of the region's telecom power brokers. (See Three to Acquire O2 Ireland.)

They could also represent Li Ka-shing's only real opportunities to become a major regional force. Outside the countries already mentioned, Hutchison operates networks in Denmark and Sweden, relatively small countries where the potential for deal-making looks scant. Nordic rivals Telia Company and Telenor Group (Nasdaq: TELN) agreed to merge their Danish operations in a joint venture in December. Sweden's Tele2 AB (Nasdaq: TLTO), which was believed to have attracted Hutchison's interest last year, wants to retain majority control of its Swedish business. And consolidation has already swept through France and Germany, Western Europe's other big markets. Failure to execute on deals in Italy or the UK could leave Hutchison's chairman with very limited options. (See Orange Feels European Squeeze, Eurobites: Numericable Funds SFR Buy With €4.7B Rights Issue and Eurobites: Telefónica Gets EC Green Light on E-Plus Deal.)

— Iain Morris, , News Editor, Light Reading